To remain in business and on the correct side of the law, a fleet must hold various principles and guidelines that govern the roads.

What is IFTA?

IFTA is the International Fuel Tax Agreement. it pertains to the cooperative agreement between 48 states in the U.S. and 10 provinces in Canada. Through IFTA, member jurisdictions act cooperatively to collect and administer taxes related to motor fuel usage.

The purpose of IFTA is to establish and maintain the concept of one fuel use license for interstate carriers and one administering base jurisdiction for each license holder. An IFTA license allows a taxpayer to file one tax report that covers all member jurisdictions.

Here is a list of the states and provinces that are members of the IFTA agreement:

Canada:

  • Alberta
  • British Columbia
  • Manitoba
  • New Brunswick
  • Newfoundland
  • Nova Scotia
  • Ontario
  • Prince Edward Island
  • Quebec
  • Saskatchewan

United States of America:

All the states except for Hawaii, Alaska, and District of Columbia

How IFTA Works?

IFTA Reporting

IFTA operating principles are:

  1. Fuel tax owed is calculated based on where the fuel was consumed.
  2. The tax credit is determined by where the fuel was purchased.
  3. IFTA finds the difference between fuel consumed and fuel purchased for each jurisdiction.

 

Filing deadlines for each quarter –

April 30th for Quarter 1,

July 31st for Quarter 2,

October 31st for Quarter 3,

and January 31st for Quarter 4.

Late filing will result in late penalties and/or interest rates.

Penalties – A penalty of $50 or 10% of delinquent taxes, whichever is greater, will be charged for failing to file a tax return, filing a late tax return, and underpaying taxes due.

Interest Rates – The current IFTA annual interest rate is 6% (increasing to 7% in 2019). Your base jurisdiction, for itself and on behalf of other jurisdictions (states/provinces) will charge interest on all delinquent taxes due to each jurisdiction, except IFTA taxes already collected by other jurisdictions according to IFTA procedures.

To get more information you can visit the official website at https://www.iftach.org

 

How to Apply for IFTA License and Decals:

If you require and IFTA License, The very first step is to fill out the application form in your base state

The basic information required for the new IFTA Applications are: 

  • Your Registered Business Name
  • Mailing Address
  • Federal Business Number
  • USDOT Number

If you download the form Online, then the completed IFTA form can be sent by mail. Jurisdictions also allow IFTA forms to be sent by fax or through taxpayer service offices.

Once the application is processed, IFTA authority in your state will issue official IFTA decals for the current year. A temporary IFTA license will be sent to you by fax while you wait for your decals.